Social Indicators Research

, Volume 124, Issue 2, pp 599–616 | Cite as

Environmental Quality and Life Satisfaction: Subjective Versus Objective Measures of Air Quality

  • Pei-shan Liao
  • Daigee Shaw
  • Yih-ming LinEmail author


The purpose of this paper is to investigate the influence of objective air quality on individual life satisfaction (LS) through the moderating effect of perceived air quality on the latter. Unlike previous studies, we incorporates both of the data from the 2010 Taiwan Social Change Survey and the monthly mean of Pollutant Standards Index (PSI) from fixed air quality monitoring stations to understand their association with individual well-being. A two-stage estimation approach is employed, in which individual perceived subjective air quality level is employed as an explanatory variable in LS regression models. The results show that the objective measure of air quality, PSI, is significantly associated with the perceived air quality and with LS, respectively. When the endogeneity of perceived air quality is considered in the relationship between objective air quality and life satisfaction, the results indicate that the perceived air quality has a positive influence on LS, while the effect of objective measure of air quality on the latter becomes insignificant. In sum, the objective air quality has an indirect effect, but no direct effect, on LS. Furthermore, individual’s age, gender, health, and variables of environmental experience and behaviors are found to be significant determinants of LS. Discussions on the findings are provided.


Perceived air quality Individual well-being Micro data PSI 


  1. Allison, P. D. (2001). Missing data. Thousand Oaks, CA: Sage Publications.Google Scholar
  2. Andrews, F. M., & Withey, S. B. (1976). Social indicators of well-being: Americans’ perceptions of life quality. New York: Plenum Press.CrossRefGoogle Scholar
  3. Argyle, M. (1997). Is happiness a cause of health? Psychology and Health, 12, 769–781.CrossRefGoogle Scholar
  4. Bardo, J. W., & Bardo, D. J. (1983). A re-examination of subjective components of community satisfaction in a British new town. Journal of Social Psychology, 120, 35–43.CrossRefGoogle Scholar
  5. Blanchflower, D. G., & Oswald, A. J. (2004). Well-being over time in Britain and the USA. Journal of Public Economics, 88, 1359–1386.CrossRefGoogle Scholar
  6. Brown, R. B. (1993). Rural community satisfaction and attachment in mass consumer society. Rural Sociology, 58(3), 387–403.CrossRefGoogle Scholar
  7. Campbell, A. (1981). The sense of well-being in America. New York: McGraw-Hill.Google Scholar
  8. Campbell, A., Converse, P. E., & Rodgers, W. L. (1976). The perceived quality of life and its implications. In A. Campbell, P. E. Converse, & W. L. Rodgers (Eds.), The quality of American life (pp. 471–508). New York: Russell Sage Foundation Press.Google Scholar
  9. Chamberlain, K. (1985). Value dimensions cultural differences and the prediction of perceived quality of life. Social Indicators Research, 17, 345–401.CrossRefGoogle Scholar
  10. Chang, Y. H., Tu S. H., & Liao P.S., (2012). 2010 Taiwan Social Change Survey (Round 6, Year 1): Environment (C00221_2) [Data file]. Available from Survey Research Data Archive, Center for Survey Research, Research Center for Humanities and Social Sciences, Academia Sinica. doi: 10.6141/TW-SRDA-C00221_2-1.
  11. Diener, E., & Lucas, R. E. (2000). Explaining differences in societal levels of happiness: Relative standards, need fulfillment, culture, and evaluation theory. Journal of Happiness Studies, 1, 41–78.CrossRefGoogle Scholar
  12. Emmons, R. A., & Diener, E. (1985). Factors predicting satisfaction judgment: A comparative examination. Social Indicator Research, 16, 157–167.CrossRefGoogle Scholar
  13. Falkenberg, A. W. (1998). Quality of life efficiency, equity and freedom in the United States and Scandinavia. Journal of Socio-Economics, 27(1), 1–27.CrossRefGoogle Scholar
  14. Ferreira, S., & Moro, M. (2010). On the use of subjective well-being data for environmental valuation. Environmental & Resource Economics, 46, 249–273.CrossRefGoogle Scholar
  15. Ferrer-i-Carbonell, A., & Gowdy, J. M. (2007). Environmental degradation and happiness. Ecological Economics, 60, 509–516.CrossRefGoogle Scholar
  16. Flint, C. G., & Luloff, A. E. (2005). Natural resource-based communities, risk, and disaster: An intersection of theories. Society and Natural Resources, 18, 399–412.CrossRefGoogle Scholar
  17. Hagerty, M. R. (1999). Unifying livability and comparison theory: Cross-national time-series analysis of life-satisfaction. Social Indicators Research, 47, 343–356.CrossRefGoogle Scholar
  18. Hagerty, M. R. (2000). Social comparisons of income in one’s community: Evidence from national surveys of incomes and happiness. Journal of Personality and Social Psychology, 78, 764–771.CrossRefGoogle Scholar
  19. Hagerty, M. R., Cummins, R. A., Ferriss, A. L., Land, K., Michalos, A. C., Peterson, M., et al. (2001). Quality of life indexes for national policy: Review and agenda for research. Social Indicators Research, 55, 1–96.CrossRefGoogle Scholar
  20. Kao, C. H. C., & Liu, B. C. (1984). Socioeconomic advance in the Republic of China (Taiwan): An intertemporal analysis of its quality of life indicators. American Journal of Economics and Sociology, 43(4), 399–412.CrossRefGoogle Scholar
  21. Kent, S. H., & Wu, S. Y. (2014). Living happily ever after? The effect of Taiwan’s National Health Insurance on the happiness of the elderly. Journal of Happiness Studies, 15, 783–808.CrossRefGoogle Scholar
  22. Land, K. (1983). Social indicators. Annual Review of Sociology, 9, 1–26.CrossRefGoogle Scholar
  23. Layard, R. (2005). Happiness: Lessons from the new science. New York: The Penguin Press.Google Scholar
  24. Lewis, S., & Lyon, L. (1986). The quality of community and the quality of life. Sociological Spectrum, 6, 397–410.CrossRefGoogle Scholar
  25. Liao, P. S. (2009). Parallels between objective indicators and subjective perceptions of quality of life: A study of metropolitan and county areas in Taiwan. Social Indicators Research, 91(1), 99–114.CrossRefGoogle Scholar
  26. Liao, P. S., Fu, Y. C., & Yi, C. C. (2005). Perceived quality of life in Taiwan and Hong Kong: An intraculture comparison. Journal of Happiness Studies, 6, 43–67.CrossRefGoogle Scholar
  27. Lu, L. (1999). Personal or environmental causes of happiness: A longitudinal analysis. Journal of Social Psychology, 139, 79–90.Google Scholar
  28. Lu, L. (2001). Understanding happiness: A look into the Chinese folk psychology. Journal of Happiness Studies, 2, 407–432.CrossRefGoogle Scholar
  29. Lu, L., & Shih, J. B. (1997). Sources of happiness: A qualitative approach. Journal of Social Psychology, 137, 181–187.CrossRefGoogle Scholar
  30. Luechinger, S. (2009). Valuing air quality using the life satisfaction approach. Economic Journal, 119, 482–515.CrossRefGoogle Scholar
  31. Luechinger, S. (2010). Life satisfaction and transboundary air pollution. Economics Letter, 107, 4–6.CrossRefGoogle Scholar
  32. MacKerron, G., & Mourato, S. (2009). Life satisfaction and air quality in London. Ecological Economics, 68, 1441–1453.CrossRefGoogle Scholar
  33. Maddala, G. S. (1983). Limited-dependent and qualitative variables in econometrics. New York: Cambridge University Press.CrossRefGoogle Scholar
  34. Martin, J. K., & Lichter, D. T. (1983). Geographic mobility and satisfaction with life and work. Social Science Quarterly, 64, 524–535.Google Scholar
  35. Mastekaasa, A., & Moum, T. (1984). The perceived quality of life in Norway: Regional variations and contextual effects. Social Indicators Research, 14, 385–419.CrossRefGoogle Scholar
  36. Menz, T. (2011). Do people habituate to air pollution? Evidence from international life satisfaction data. Ecological Economics, 71, 211–219.CrossRefGoogle Scholar
  37. Michalos, A. C., Hubley, A. M., Zumbo, B. D., & Hemingway, D. (2001). Health and other aspects of the quality of life of older people. Social Indicators Research, 54, 239–274.CrossRefGoogle Scholar
  38. Michalos, A. C., Zumbo, B. D., & Hubley, A. (2000). Health and the quality of life. Social Indicators Research, 51, 245–286.CrossRefGoogle Scholar
  39. Ng, Y. K. (2011). Consumption tradeoff vs. catastrophes avoidance: Implications of some recent results in happiness studies on the economics of climate change. Climate Change, 105, 109–127.CrossRefGoogle Scholar
  40. Oliver, P. (1984). If you don’t do it, nobody else will’: Active and token contributors to local collective action. American Sociological Review, 49, 601–610.CrossRefGoogle Scholar
  41. Oppong, J. R., Ironside, R. G., & Kennedy, L. W. (1988). Perceived quality of life in a centre-periphery framework. Social Indicators Research, 20, 605–620.Google Scholar
  42. Oswald, A. J. (1997). Happiness and economic performance. Economic Journal, 107, 1815–1831.CrossRefGoogle Scholar
  43. Popenoe, D. (1983). Urban scale and the quality of community life: A Swedish community comparison. Sociological Inquiry, 53, 404–418.CrossRefGoogle Scholar
  44. Rehdanz, K., & Maddison, D. (2005). Climate and happiness. Ecological Economics, 52, 111–125.CrossRefGoogle Scholar
  45. Rehdanz, K., & Maddison, D. (2008). Local environmental quality and life-satisfaction in Germany. Ecological Economics, 64, 787–797.CrossRefGoogle Scholar
  46. Schuessler, K. F., & Fisher, G. A. (1985). Quality of life research and sociology. Annual Review of Sociology, 11, 129–149.CrossRefGoogle Scholar
  47. Sirgy, M., Joseph, R. N., Widgery, D., Lee, D. J., & Grace, B. Y. (2010). Developing a measure of community well-being based on perceptions of impact in various life domains. Social Indicator Research, 96, 295–311.CrossRefGoogle Scholar
  48. Tao, H. L. (2005). The effects of income and children on marital happiness—evidence from middle- and old-aged couples. Applied Economics Letters, 12, 521–524.CrossRefGoogle Scholar
  49. Tepperman, L., & Curtis, J. (1995). A life satisfaction scale for use with national adult samples from the USA, Canada and Mexico. Social Indicator Research, 35, 255–270.CrossRefGoogle Scholar
  50. Thoits, P. A., & Hewitt, L. N. (2001). Volunteer work and well-being. Journal of Health and Behavior, 42, 115–131.CrossRefGoogle Scholar
  51. Tsou, M., & Liu, J. (2001). Happiness and domain satisfaction in Taiwan. Journal of Happiness Studies, 2, 269–288.CrossRefGoogle Scholar
  52. Tsui, H. (2014). Income and happiness: The effect of absolute income, relative income and expected income. Journal of Policy Modeling (forthcoming).Google Scholar
  53. Van Praag, B., & Baarsma, B. (2005). Using happiness surveys to value intangibles: The case of airport noise. Economic Journal, 115, 224–246.CrossRefGoogle Scholar
  54. Veenhoven, R. (1995). The cross-national pattern of happiness: Test of predictions implied in three theories of happiness. Social Indicators Research, 34, 33–68.CrossRefGoogle Scholar
  55. Veenhoven, R. (1996). Developments in satisfaction research. Social Indicators Research, 37, 1–45.CrossRefGoogle Scholar
  56. Welsch, H. (2006). Environment and happiness: Valuation of air pollution using life satisfaction data. Ecological Economics, 58, 801–813.CrossRefGoogle Scholar
  57. Wilkening, E. A. (1982). Subjective indicators and the quality of life. In R. M. Hauser, D. Mechanic, A. O. Haller, & T. S. Hauser (Eds.), Social structure and behavior (pp. 429–441). New York: Academic Press.CrossRefGoogle Scholar
  58. Ziegler, J. A., & Britton, C. R. (1981). A comparative analysis of socioeconomic variations in measuring the quality of life. Social Science Quarterly, 62, 303–312.Google Scholar
  59. Zinam, O. (1989). Quality of life, quality of the individual, technology and economic development. American Journal of Economics and Sociology, 48, 55–68.CrossRefGoogle Scholar

Copyright information

© Springer Science+Business Media Dordrecht 2014

Authors and Affiliations

  1. 1.Research Center for Humanities and Social SciencesAcademia SinicaNankang, TaipeiTaiwan
  2. 2.Institute of EconomicsAcademia SinicaNankang, TaipeiTaiwan
  3. 3.Department of Applied EconomicsNational Chiayi UniversityChiayiTaiwan

Personalised recommendations